Chatham Foot Specialist, P.C. v. Health Care Service Corp. Corrected opinion posted 10/11/05

CourtIllinois Supreme Court
DecidedSeptember 22, 2005
Docket99067 Rel
StatusPublished

This text of Chatham Foot Specialist, P.C. v. Health Care Service Corp. Corrected opinion posted 10/11/05 (Chatham Foot Specialist, P.C. v. Health Care Service Corp. Corrected opinion posted 10/11/05) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chatham Foot Specialist, P.C. v. Health Care Service Corp. Corrected opinion posted 10/11/05, (Ill. 2005).

Opinion

Docket No. 99067–Agenda 15–March 2005.

CHATHAM FOOT SPECIALISTS, P.C., Appellant, v. HEALTH CARE SERVICE CORPORATION, d/b/a Blue Cross Blue Shield of Illinois, Appellee.

Opinion filed September 22, 2005.

JUSTICE McMORROW delivered the opinion of the court:

Plaintiff, Chatham Foot Specialists, P.C., filed a breach of contract action to recover fees against defendant, Health Care Service Corporation, d/b/a Blue Cross Blue Shield of Illinois (Blue Cross). The circuit court of Cook County granted Blue Cross’ motion for summary judgment on the basis that plaintiff’s failure to register as a professional service corporation with the Illinois Department of Professional Regulation (the Department), pursuant to section 12 of the Professional Service Corporation Act (Act) (805 ILCS 10/12 (West 2000)), rendered plaintiff’s contract with Blue Cross void and precluded plaintiff from maintaining an action to recover fees under any legal theory. The appellate court affirmed the judgment of the circuit court. No. 1–03–3425 (unpublished order under Supreme Court Rule 23). For the reasons that follow, we reverse the judgment of the appellate court.

BACKGROUND

The facts underlying this appeal are undisputed. Plaintiff is an Illinois professional service corporation whose purpose is to deliver podiatric services to its patients. During the time period relevant to this litigation, Dr. Mitchell M. Rosner, a licensed podiatrist, is, and has been, plaintiff’s sole shareholder, officer and director. Plaintiff also has in its employment a number of additional podiatrists, who are all properly licensed to practice podiatry.

On June 1, 2000, plaintiff entered into a contractual agreement with defendant, Blue Cross. Blue Cross is in the business of providing health insurance. Under the June 2000 agreement, plaintiff contracted with Blue Cross to deliver podiatric services as a participating provider under Blue Cross’ insurance plans. Blue Cross, in turn, agreed to timely pay to plaintiff fees for podiatric services provided by plaintiff to patients insured by Blue Cross. At the time plaintiff executed the agreement with Blue Cross, plaintiff was properly organized under the Act and was in good standing with the Secretary of State. However, plaintiff did not possess a current certificate of registration issued by the Department.

On November 26, 2001, Blue Cross unilaterally cancelled the agreement with plaintiff, effective December 25, 2001. On December 27, 2001, plaintiff filed a four-count complaint against Blue Cross, seeking to recover payments under the June 2000 agreement for podiatric services rendered to patients insured by Blue Cross. In count I, plaintiff alleged that Blue Cross breached the June 2000 agreement because Blue Cross failed to pay its bills due plaintiff on a timely basis. Count II of plaintiff’s complaint alleged that Blue Cross engaged in fraud, in that Blue Cross intentionally misrepresented that it would pay claims for treatment of its insureds by plaintiff, causing plaintiff monetary damages. In count III of the complaint, plaintiff alleged that Blue Cross committed unfair and deceptive acts in violation of the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2000)). Finally, count IV of plaintiff’s complaint alleged that Blue Cross violated section 155 of the Illinois Insurance Code by delaying and failing to pay its claims (215 ILCS 5/155 (West 2000)).

On March 5, 2002, Blue Cross filed in the circuit court a motion to dismiss plaintiff’s complaint pursuant to sections 2–615 and 2–619 of the Code of Civil Procedure (735 ILCS 5/2–615, 2–619 (West 2000)). Blue Cross alleged that, based upon the fact that plaintiff did not possess a current certificate of registration issued by the Department, plaintiff had “not complied with the mandatory licensing provisions of the Illinois Medical Practice Act and Medical Corporation Act and, therefore, under established case law, [plaintiff] is barred from maintaining an action to recover fees for medical services under any legal theory.”

In response, plaintiff did not deny that it had failed to maintain a current certificate of registration with the Department. However, plaintiff asserted that its lack of compliance with the registration requirement neither violated public policy nor harmed the public welfare. According to plaintiff, neither the Medical Practice Act nor the Medical Corporation Act governed plaintiff and its practitioners. Because plaintiff is a professional service corporation incorporated for the purpose of delivering podiatric services and not medical services, plaintiff contended that only the statutory licensing requirements contained in the Podiatric Medical Practice Act of 1987 (225 ILCS 100/1 et seq. (West 2000)), and the administrative requirements contained in the Act (805 ILCS 10/1 et seq. (West 2000)) applied to plaintiff and its podiatrists.

Plaintiff noted that each podiatrist in its employ maintained a valid license to practice podiatry in Illinois, and that it therefore complied with the licensing requirements under the Podiatric Medical Practice Act. With respect to the administrative requirements set forth in the Act, plaintiff argued that because the Act’s “certificate of registration is just an administrative mechanism to confirm that an incorporated practitioner holds a valid Illinois professional license,” its lack of registration did not bar it from maintaining an action against Blue Cross.

On October 30, 2002, the circuit court denied Blue Cross’ motion to dismiss without prejudice. Although the court granted plaintiff leave to file an amended complaint, plaintiff did not avail itself of this opportunity. Blue Cross thereafter filed a motion to reconsider. The circuit court denied this motion on December 16, 2002.

On April 16, 2003, Blue Cross filed in the circuit court a motion for summary judgment, pursuant to section 2–1005 of the Code of Civil Procedure (735 ILCS 5/2–1005 (West 2000)). In its summary judgment motion, Blue Cross repeated the argument that it had unsuccessfully advanced in its prior motion to dismiss. Blue Cross asserted that it was entitled to judgment on plaintiff’s complaint as a matter of law because plaintiff failed to obtain a certificate of registration from the Department pursuant to section 12 of the Act (805 ILCS 10/12 (West 2000)) and, therefore, was barred from maintaining an action to recover fees for medical services under any legal theory. In addition, Blue Cross argued, because plaintiff lacked a certificate of registration, it was engaged in the unlicensed practice of medicine, an absolute bar to any right of recovery. In its motion, Blue Cross noted that plaintiff had admitted that it did not possess a certificate of registration from the Department at the time it entered into the June 2000 agreement, but that plaintiff did obtain a certificate of registration in September 2002.

In response, plaintiff reiterated the argument it had advanced in opposition to Blue Cross’ earlier motion to dismiss.

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Chatham Foot Specialist, P.C. v. Health Care Service Corp. Corrected opinion posted 10/11/05, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chatham-foot-specialist-pc-v-health-care-service-c-ill-2005.